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Share Liverpool FC still pushing to rescue club

February 28, 2008by Jim Boardman

Liverpool FC’s future ownership is likely to change somewhere in the next two-to-six weeks, but there is still no clear idea of how it will change. George Gillett will sell his share, and unless Tom Hicks pulls off an unexpected trick, DIC will become at least part owners of LFC.

If the only change made is that Gillett sells his share to DIC, then we find ourselves still in the awkward situation of being owned fifty-fifty by two partners who aren’t 100% trusting of each other. Both parties therefore want to be in a position to have a majority holding in the club, with the control and final say that brings.

It’s difficult to imagine a scenario where George Gillett would be willing to agree to a sale of part of his share to Hicks, which would give Hicks control. He’s hardly in a mood to give Hicks any favours, and this would reduce the value of the rest of his share DIC’s eyes, their bid would then be reduced or even withdrawn. But it’s equally difficult to see how Hicks could afford the whole 50% and still be able to take the club forward into a profitable future. Hicks needs to buy in full if he’s to buy at all, but he hasn’t got the means.

Hicks and Gillett found it a nightmare to get their hands on the £350m loan in January, even when pooling their resources and finding whatever assets they could between them as guarantees for the finance. For Hicks to buy in full not only would he need to buy Gillett’s half, including a profit for Gillett, he’d need to find funding for the new stadium. The new stadium was always vital if Hicks and Gillett were to be able to make worthwhile profit from the club – if it makes a profit at all. To cover existing loans, to buy out Gillett and to finance the new stadium, Hicks would need to borrow a massive £675m. In US currency that’s around $1.3bn, which is equivalent to the whole of the Texan’s estimated worth.

Had Gillett and Hicks stayed on in partnership they would struggle to get finance for the new stadium, according to those who deal with the banks at those levels on a regular basis. So clearly Hicks would struggle yet more had he taken on Gillett’s debts alone. Without a wealthy third party coming in to help him it’s difficult to see how he can do any more than hold on to the 50% he currently has.

The existing debt arrangements mean that the two banks are heavily involved in any negotiations over Gillett’s share. DIC are believed to have made good progress with the banks in terms of getting the club out of that £350m debt should they take over, but it’s less clear how this works if Hicks remains a joint owner.

DIC have made it quite clear that they only have eyes for Liverpool. This isn’t a regular investment opportunity for them. That said, their feelings for the club still won’t see them throwing money away “like a drunken sailor”, as someone once said. They’ve also got a lot more patience than they might have on other deals, and if they have to will buy the 50% now and work on getting more at a later date.

Unfortunately a joint 50-50 shareholding doesn’t help anyone. Even if Hicks and Sheikh Mohammed become best friends overnight there will be big decisions they just don’t agree on. It’s difficult to operate when there is no casting vote to settle differences.

DIC (or Hicks for that matter) could invest extra money into the club and in doing so increase the split in their favour – but unless the other partner agreed this couldn’t be done.

In focussing on what seems to be a battle between DIC and Hicks for control of the club, it’s important not to forget the potential of the Share Liverpool FC initiative. The idea was that enough fans across the world put £5000 each (or as part of a group) into the club then £500m could be raised and in turn the owners removed and the club pointed back in the right direction.

Share Liverpool FC say they’ve had almost 10,000 responses from people indicating a definite willingness to be involved, and a similar amount who are interested but need more information.

They’ve now got two well-known former players on board, former centre-back and assistant manager Phil Thompson, and former striker John Aldridge, have both pledged £5000.

As well as five grand, Thompson gave this endorsement to the scheme: “Liverpool Football Club has always needed its fans, now more than ever. Not if, but when our current owners decide to sell, we as fans need to be in a position to help. The biggest thing that people ask is: ‘Can the Share Liverpool scheme really work?’ To this I say one word: Istanbul.

“That fantastic victory could only have happened to a club like Liverpool. Why? Because the fans believed it could happen – and with their help we pulled off one the greatest miracles in the history of club football. So, if we believe we can make Share Liverpool work, it will happen, too. Get on to the website now and pledge your support just as I am doing.”

Aldo was equally supportive of the idea: “What a great concept. I’m glad to sign for Share Liverpool FC. This is a fantastic opportunity for the fans who dearly love the club to own it for themselves – and set the standard for other fans to follow. It would be terrific if it led to other fans owning their clubs too.”

SLFC now has an 18-strong steering group in place, which includes experts in areas such as finance and law. The financial director of Ethel Austin is one, alongside a senior partner from Price Waterhouse Cooper. One of the representatives of the Liverpool Supporters’ Union, Spirit of Shankly, has also taken up the offer of a place in the committee.

Dr Rogan Taylor has played a big role in getting this scheme off the ground, and has been delighted – if a little snowed under – with the response so far. He said: “This puts Share Liverpool FC on to a proper footing. We have brought together the different skill sets in areas such as finance, law and marketing that are needed if we are going to succeed in this venture.”

Although the original intention for Share Liverpool FC was to take the club over completely, the possibility of a partial shareholding must be considered. With DIC and Hicks heading towards a 50-50 ownership of the club, perhaps the inclusion of this fans group would help avoid stalemate in the board room. At the often quoted valuation of £400m for the club, 16,000 supporters could buy a 20% share of the club, and in time this could be increased.

11 Comments

Jim some of the critics of this scheme point to the fact that Hicks cannot be forced to sell. Why is the scheme viewed in such a short term way? The scheme could be launched as an investment fund with an aim to bid for the club in the 5-10 year timescale. There is even an outside possibility of an agreement with DIC that the club be sold by them to ShareliverpoolFC in 7 years time at an agreed multiple. In the meantime ShareliverpoolFC might take a minority and or be involved in a separate entity to build the stadium.

I committed myself to the scheme on day one before the site crashed and believe it is the way forward not just for us but for other premiership clubs.

If DIC involvement becomes a reality I hope that all of those such as yourself encourage them to make some kind of statement to the fans covering our concerns, they are traditionally reticent but in the light of the current turmoil they could go a long way towards winning the fans with a common-sense statement. We are realists we don’t want any more snoogdoogy spin. just tell us like it is.

Hicks: Gillett needs my consent to sell
By James Carroll – 28/02/2008 18:10
Tom Hicks has revealed that he has an option to prevent George Gillett from selling his shares in Liverpool Football Club to Dubai International Capital.

Reports suggest that DIC are closing in on a deal for Gillett’s 50% stake in the Reds but Hicks says that neither of the Americans can sell their shares without the consent of the other.

The Texan has also reiterated his desire to remain at the club.

He said: “Not only am I not going to sell, my partner cannot sell without my approval.

“So, I kind of have the ability to determine the outcome of what is going to happen, and I am right in the middle of that.”

Hicks also, somewhat cryptically, added: “For a lot of reasons I can’t discuss, I haven’t been able to fix it yet but I am preparing to be in a position to fix it.”

Now Hicks won’t allow Gillett to sell – which means no DIC or Share Liverpool fc if he gets his way!

Everyday a new story, everyday a new angle with Hicks involved. Everyday the name of Liverpool FC sullied by a man bargaining for more money through the media.

Do you get the impression that he personally enjoys destabilising the club, knowing that he – for now, I hope – holds some significant cards?

His words are, however, quite hollow, as I can’t see how Gillett’s daily finances can hold up to the strain of financing or re-financing to sustain his involvement. He will have to sell. Unless Hicks can pull a last minute rabbit out of the hat, he knows that Gillett will have told DIC how Hicks can’t afford to or is unable to sustain his 50% share in the club easily.

Hicks needs to stop his public posturing and understand the games up. We don’t want him, his now anonymous business partner doesn’t want him – which just leaves his wife and kids. And I suspect Hicks Jnr may do a Foster Gillett and advise his Daddy to take his money and run.

a lot has been going on now, talks about selling and not selling, about gilete and hicks etc.., since the share liverpool fc is going forward day after day why not to start negotiating with hicks for buying Gilete’s shares which is 50% of the club but in terms of to follow more in the folowing years so share liverpool fc would have every year 5 to 10% of hicks shares so wthin 5 to 10 years liverpool will be own 100% by their own supporters!! this is a great idea and a way for hicks to save his face and stay in for enough time to make enough profit while he is sitting at home in texas and get the hell out of this mees as a man and as a gentelman.

I think Hicks’ latest comments just show how determined he is to hold on to LFC. He can’t afford the club himself and maybe he can’t find another willing partner either, so now he’s threatening to force Gillett to stay involved as an unwilling partner.

This guy is going to be an ararse until the bitter end. He has now publically shown his hand by threatening to stop Gillett from selling and even if Gillet sells it is optomistic to think Hicks will sell a portion of his shares as he will lose control.

Hopeully DIC show more patience and can come to an agreement with him. It should not be forgotten that DIC took so much time during the original due dillegence process that they lost the deal, then an exit plan was reported by the media.

One ay or another it will get worse before it gets better and the club will suffer as a result.

To many people Liverpool fc and the City of Liverpool were a symbol of solidarity with passion, standing up and conquering over all on comers. may that be any team in europe or capitalist systems of power.
However in a very small period of time that has gone, what we stand for at the minute is anyones guess, its certaintly not the Liverpool way anymore. Everyones hurting and there s no doudt most of us were suckered by the Americans coming on board, boy were we stupid how did we not see this coming, a texan oil money man with close links to dubya Bush buying our club.
I just hope we can turn it around as Shankley once said ,” i wanted to build liverpool up and up in that when teams came here they would just submit.” Where has our bastion gone its been breached, for now, its up to us to re capture our beloved club, and learn to from the mistakes made and always remember that what we were before the yanks came was better than any amount of millions in the bank.